In 2009, the Competition Authority will particularly focus on consumer protection issues.
The so-called decreto milleproroghe (one thousand deferrals decree) of 31 December 2008 includes, amongst the measures to face the economic crisis, an amendment to the funding of the Italian Competition Authority, which may have a significant impact on its activity. In particular, the decree states that the fines imposed by the Authority for breach of the rules on misleading advertising and unfair competition will be allocated to the Authority up to EUR 50,000 per fine, as a means of partial self-funding. In case of higher fines, the amount exceeding EUR 50,000 will be allocated to the State Budget.
The decree issued by the Italian Government was published on 31 December 2008. It is immediately enforceable, but it needs to be converted into law by 1 March 2009, otherwise it will lose effects retroactively.
In 2009, the Competition Authority will, therefore, particularly focus on consumer protection issues, including all forms of unfair commercial practices such as falsely describing a product as, for example, “gratis”, “free” or “without charge”; claiming that a product is able to cure illnesses, dysfunctions or malformations; or creating the false impression that the consumer has already won or will win a prize.
It will also concentrate its attention to misleading or hidden advertising, such as those cases where the advertisement is not clearly recognisable as such.
The Authority may investigate acting on its own authority—that is to say, without having to wait for an external complaint to be submitted. It has investigative powers which give it the authority to access any relevant paper or electronic document, request information of relevance to the investigation and impose penalties in the event of refusal. If untruthful information or documents are disclosed, it may conduct inspections, use the offices of the Customs and Excise Police (Guardia di Finanza) and order expert testimony.
Once a violation has been ascertained, the Authority may impose the party to stop it, order rectifying statements to be published at the expense of the company found liable, and issue penalties of between EUR 5,000 and EUR 500,000. If the practice relates to hazardous products or it could—even indirectly—threaten the safety of children or adolescents, the minimum penalty is EUR 50,000. In the event of non-compliance with the Authority's measures, the penalty can range from EUR 10,000 to EUR 150,000.
A system of undertakings has also been instituted: except for cases of manifest unfairness and gross violations, the Authority may waive the need to prove that a violation has been committed if the trader undertakes to remove the unlawful aspects from its commercial practices.
Moreover, Italy is about to introduce a specific provision giving associations and individuals belonging to a specific class the capacity to sue collectively for tort liability, unfair trade practice and anti-competitive behaviour. The new law is meant to become effective on 1 July 2009, as the Government is amending the original text.
Under the new class-action law, claimants will be able to obtain a declaratory judgment of the right to obtain compensation and the refund of sums due. For more information on this topic, please see "Class Actions, Italian Style" in Bloomberg Law Reports - Antitrust & Trade, Vol. 1, No. 9, December 2008, authored by McDermott partner Veronica Pinotti.